Reportedly, cloud-based marketing provider
) is putting itself up for sale. Per Reuters Vocus, which has a
market cap of over $285.3 million is said to be working with
Stifel Financial Corp.
), an investment banking company, to find suitable buyers.
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Moreover, few private-equity firms and Vocus' industry peers have
expressed their interest in the company. Companies like
Web.com Group, Inc.
) have expressed their intent and are willing to offer $17.0 per
share for the company. Chicago-based private equity firm, GTCR
has also shown an interest to buy this cloud-based company.
Vocus is facing ever-increasing competition from the likes of
) in the software-as-a-service (SaaS) market. User preference
seems to have shifted toward SaaS-based Digital Marketing suite
from standalone PR solutions. This practice is limiting Vocus'
growth prospects and profitability.
Vocus reported adjusted loss per share of 4 cents in the
fourth-quarter of 2013, which came below management's guidance of
earnings 3 to 4 cents and earnings of 1 cent per share reported
in the year-ago quarter.
Moreover, the company has incurred operating losses over the past
few years. Operating loss in the fourth-quarter of 2013 was $0.9
million compared to an income of $0.6 million in the year-ago
quarter. We anticipate disappointing operating results from Vocus
until sales pick up.
Nonetheless, Vocus has a debt-free balance sheet and had $34.7
million in cash and short-term investments as of Dec 31, 2013.
Additionally, Vocus' transformation from a purely PR-centric
business to a cloud-based marketing solutions provider is proving
to be beneficial, especially with respect to total active
Vocus remains a potential acquisition target for the marketing
suite it provides and its steady customer base. Currently, Vocus
carry a Zacks Rank #3 (Hold). Stifel and Web.com carry a Zacks
Rank #2 (Buy).